Over the past few weeks, Vice President-elect Biden and I have announced key members of our economic team. And they are working, as we speak, to craft a recovery program that will save and create millions of new jobs and grow our struggling economy. But we know that in the long run, the path to jobs and growth begins right here, in America's schools, in America's classrooms.

So today, we're pleased to announce the leader of our education team, whose work will be critical to these efforts, our nominee for secretary of Education and my friend, Arne Duncan.

In the next few years, the decisions we make, about how to educate our children, will shape our future for generations to come. They will determine not just whether our children have the chance to fulfill their God-given potential or whether or workers have the chance to build a better life for their families but whether we as a nation will remain, in the 21st century, the kind of global economic leader that we were in the 20th.

Because at a time when companies can plant jobs wherever there's an Internet connection, and two-thirds of all new jobs require a higher education or advanced training, if we want to outcompete the world tomorrow, then we're going to have to outeducate the world today.

Unfortunately when our high school dropout rate is one of the highest, in the industrialized world, when a third of all 4th graders can't do basic math, when more and more Americans are getting priced out of attending college, we're falling far short of that goal.

For years, we've talked our education problems to death in Washington. But we've failed to act, stuck in the same tired debates that have stymied our progress and left schools and parents to fend for themselves -- Democrat versus Republican, vouchers versus the status quo, more money versus more reform -- all along failing to acknowledge that both sides have good ideas and good intentions.

We can't continue like this. It's morally unacceptable for our children and economically untenable for America.

We need a new vision for the 21st century education system, one where we aren't just supporting existing schools but spurring innovation; where we're not just investing more money but demanding more reform; where parents take responsibility for their children's success; where we're recruiting, retaining and rewarding an army of new teachers; where we hold our schools, teachers and government accountable for results; and where we expect all our children not only to graduate high school, but to graduate from college and to get a good paying job.

These are precisely the goals to which Arne Duncan has devoted his life, from his days back in college, tutoring children here in Chicago, to his work at the helm of a non-profit remaking schools on the South Side to his time working for the Chicago Public Schools, where he became chief executive officer of this city's school system.

When it comes to school reform, Arne is the most hands-on of hands-on practitioners. For Arne, school reform isn't just a theory in a book; it's the cause of his life. And the results aren't just about test scores or statistics, but about whether our children are developing the skills they need to compete with any worker in the world for any job.

When faced with tough decisions, Arne doesn't blink. He's not beholden to any one ideology, and he doesn't hesitate for one minute to do what needs to be done. He's worked tirelessly to improve teacher quality, increasing the number of master teachers who've completed a rigorous national certification process from just 11 to just shy of 1,200, rewarding school leaders and teachers for gains in student achievement.

He's championed good charter schools, even when it was controversial. He's shut down failing schools and replaced their entire staffs, even when it was unpopular. This school right here, Dodge Renaissance Academy, is a perfect example. Since this school was revamped and reopened in 2003, the number of students meeting state standards has more than tripled.

In just seven years, Arne's boosted elementary test scores here in Chicago from 38 percent of students meeting the standards to 67 percent. The dropout rate has gone down every year he's been in charge. And on the ACT, the gains of Chicago students have been twice as big as those for students in the rest of the state.

So when Arne speaks to -- to educators across America, it won't be from up in some ivory tower, but from the lessons he's learned during his years changing our schools from the bottom up. I remember a conversation we had about one of those lessons a while back. We were talking about how he'd managed to increase the number of kids taking and passing AP courses in Chicago over the last few years. And he told me that in the end, the kids weren't any smarter than they were three years ago; our expectations for them were just higher.

Well, I think it's time that we raised expectations for our kids all across this country and built schools that meet and exceed those expectations.

As the husband and brother of educators, the vice president-elect and I know this won't be easy. We've seen how hard Jill and Maya work every day.

And we know it's going to take all of us, working together, because in the end, responsibility for our children's success doesn't start in Washington, it starts in our homes and our families.

No education policy can replace a parent who makes sure a child gets to school on time, or helps with homework and attends those parent-teacher conferences. No government program can turn off the TV or put away the video games and read to a child at night.

We all need to be part of the solution. We all have a stake in the future of our children.

I'll never forget my first visit to this very school several years ago, when one of the teachers here told me about what she called "These Kids Syndrome" -- our willingness to find a million excuses for why "these kids" can't learn, how "these kids" come from tough neighborhoods, or "these kids" have fallen too far behind. "When I hear that term, it drives me nuts," the teacher told me. "They're not `these' kids, they're our kids."

I can't think of a better way to sum up Arne's approach to education reform. With his leadership, I'm confident that together, we will bring our education system and our economy into the 21st century and give all our kids the chance to succeed.

I'm going to ask Joe to say something briefly, and then we'll have Arne come up.

Biden: Thank you, Mr. President-elect. Congratulations, Arne.

My mom has an expression -- and you-all are tired of hearing me say this all through the last couple years -- that children tend to become that which you expect of them. Children tend to become that which you expect of them. These kids, Mr. President, are the kite strings that lift our national ambitions aloft. These kids are, as you said, our kids.

And Arne Duncan, as the secretary of Education, is going to expect a great deal of our children and, I expect, Arne, maybe of our parents, as well. And that's a really very, very good thing because if our children are going to succeed, if our economy is going to thrive, we have to have an education system that's second to none in the world. That's the only way our children and our nation are going to be able to compete in today's global economy.

Any nation, as -- to paraphrase what the vice -- the president- elect just said -- any nation that outcompetes us -- out-educates us will out-compete us. It's that basic. And that means a stronger commitment to our high schools, our elementary schools, but also our community colleges, and it means college degrees must be within the reach of all -- all -- of our children, for nothing less is good enough.

But education is not just about competing, as any teacher within the walls of this school fully understands. It's about changing lives. As was referenced by the president-elect, his sister and my wife, who are educators, they understand that -- that they need also -- the very good teachers are inspirations to their children. Education systems are inspiration to children.

From -- from what I've learned from my wife, when you educate a child, you do a lot more than teach them math, grammar, historical facts. You shine a light. You open doors. You make it possible for dreams to come true. You give a child hope and then nothing is ever the same again for that child.

And that's what Arne Duncan has done, from the time he got out of school to this very moment. He's shined a light for an awful lot of these kids. He's raised standards. He's helped kids in school. He's expected more. He's changed lives. And I can't think of anything more important for America's next secretary of Education to do than what Arne has been doing all along. I think this is a truly great pick, and I look forward to working with Arne. And congratulations.

Duncan: Thank you so much, Vice President-elect and President-elect Obama. I am deeply, deeply honored to be asked to serve in your administration. Like so many Americans, I was inspired by your campaign. I'm even more inspired by the team of people you are building to help bring much needed change to our country.

While many issues will demand your attention, I am convinced that no issue -- no issue is more pressing than education. Whether it's fighting poverty, strengthening our economy, or promoting opportunity, education is the common thread. It is the civil rights issue of our generation, and it is the one sure path to a more equal, fair and just society.

Education has been my life's work, starting on the South Side of Chicago, where I grew up, along with my sister and brother, as a part of my mother's inner-city after-school tutoring program.

Her remarkable courage and dedication has been a constant source of inspiration to me. It continued throughout high school, college and much of my professional life, including Australia, where I worked with underprivileged young people when I wasn't playing basketball.

I am grateful that you have recognized all the hard work our team here in Chicago has done, to turn around struggling schools and create new learning options and opportunities across this city.

I absolutely did not do this alone. And I am confident that the progress will continue. We are on a winning streak here and improving at twice the rate of the state, on elementary test scores, and at twice the rate of the state on the ACT test. Those trends must continue.

I am also eager to apply some of the lessons we have learned here in Chicago to help school districts all across our country. We have worked with a tremendous sense of urgency because we can't wait.

Our children have just one chance to get a quality education. And they need and deserve the absolute best. While there are no simple answers, I know from experience that when you focus on basics, like reading and math, and when you embrace innovative new approaches and when you create a professional climate, to attract great teachers, you can create great schools.

We are producing more National Board certified teachers than any other big-city school system in the country. And in this work, talent matters tremendously. We must continue to attract and support the best and brightest teachers, who are committed to making a difference in the lives of our children.

I just want to take a moment to thank a few people, who made it possible for me to be here today, starting with Mayor Daley. He had the confidence in my seven years ago, when he asked me to take my current job. And he has always supported me when we made tough decisions, like the one to close and reopen this school right here.

I want to thank our mutual friend John Rogers, who has been a mentor and friend to me since I was 10 years old. He gave my sister and I the opportunity to start a great school on the South Side of Chicago, and that has become a model for success in urban education.

I want to thank my children, Claire and Ryan, and my wife, Karen, for all the tremendous support she's provided me during this job. And I want to thank her in advance for what I expect will be an even more demanding job in the years ahead.

And finally, I want to thank all the people of Chicago who have helped make us a national model for reform, starting with my partner, Barbara Eason-Watkins and our board president, Rufus Williams.

I know how important teamwork is, and it takes a lot of teamwork to succeed in education. I am deeply, deeply grateful to be a part of the Obama team. And together, we have a chance to do something extraordinary for our nation's children. Thank you.

Obama: Okay. I just want to dispel one rumor before I take questions. I did not select Arne because he's one of the best basketball players I know – [laughter] – Although I will say that I think we are putting together the best basketball-playing Cabinet -- [laughter] -- in American history. And I think that is -- that is worth noting.

I'm going to take a few questions. Let me start with Barbara Pinto at ABC. How are you, Barbara?

Pinto: [off-mic] – you had mentioned the ties between education and the economy, and that's where I'd like to take us.

Obama: Sure.

Pinto: The Federal Reserve is expected to lower the Fed funds rate today to 50 basis points, one of the lowest rates in history.

Obama: Right.

Pinto: I'm just wondering, how confident are you in Ben Bernanke's decision? And with that decision, are we running out of options to jump-start the economy?

Obama: Well, I don't think it's good policy for the president or a president-elect to second-guess the Fed, which is an independent body. But let me just make an observation that we are running out of the traditional ammunition that's used in a recession, which is to lower interest rates.

They're getting to be about as low as they can go. And although the Fed is still going to have more tools available to it, it is critical that the other branches of government step up, and that's why the economic recovery plan is so absolutely critical.

And my economic team, which I'm going to be meeting with today, is helping to shape what is going to be a bold agenda to create 2.5 million new jobs, to start helping states and local governments with shovel-ready projects, rebuilding our roads, our bridges, making sure that schools, like this one, are energy-efficient; putting people back to work, getting businesses to start seeing some increase in demand so that we can get, instead of a downward spiral, start getting on an upward spiral. And I'm confident that we can accomplish that if we've got Democrats and Republicans, federal, state, local governments all working together.

But look, we are going through the toughest time economically since the Great Depression, and it's going to be -- it's going to be tough, and we're going to have to work through a lot of these difficulties, these structural difficulties that built up over many decades, some of it having to do with the financial industry and the huge amounts of leverage, the huge amounts of debt that were taken on, the speculation and the risk that was occurring, the lack of financial regulation; some of it having to do with our housing market, stabilizing that. It's going to be, I think, critical for us to look at some of the long-term issues that I talked about during the campaign, health care and energy.

And finally, education is going to be a -- play a critical role in this. You know, what the Fed does or what our administration does in terms of short-term emergency action is obviously going to be important to people's everyday lives. But if we pursue the kind of strategy that Arne Duncan's pursued and I want to see our administration pursue, which is making no excuses and expecting high achievement from every child, if we can get young people focused on education, if we can change our culture so that we are once again valuing intellectual achievement, and if we are willing to all pull together around making our schools better, that's going to be the single biggest determinant in terms of how our economy does long-term.

Okay. John McCormick.

McCormick: Thank you, Mr. President-elect.

First of all, given the situation here in Illinois, do you favor or oppose a special election to fill your vacancy? And secondly you told us, at your first press conference, after the election, that you were going to take a very hands-off approach to filling that spot.

Over the weekend, the Tribune reported that Rahm Emanuel, your incoming chief of staff, had presented a list of potential names that --

Obama: John, John, let me just cut you off, because I don't want you to waste your question.

As I indicated yesterday, we've done a full review of this. The facts are going to be released next week. It would be inappropriate for me to comment because for example, the story that you just talked about, in your own paper; I haven't confirmed that it was accurate. And I don't want to get into the details at this point.

So do you have another question?

McCormick: There's not conflict between what you said, your hands-off approach, and the possibility that aides did present some names.

Obama: John, John, I said, the U.S. Attorneys Office specifically asked us not to release this until next week.

McCormick: What about on the special election, the concept of that, given kind of the chaos here in Illinois?

Obama: You know, I've said that I don't the governor can serve effectively in his office. I'm going to let the state legislature make a determination, in terms of how they want to proceed.

McCormick: Do you or Duncan have a better jump shot?

Obama: Duncan, much better. That one's an easy one.

All right. [inaudible].

[reporter]: In the Chicago Public Schools, despite all of their achievements, there has still been many who believe they could do much better. Families wrestle with where to go to school.

Obama: Right.

[reporters]: You yourself have sent your daughters to private schools.

What kind of commitment can you make for resources now as president for the public school system? Do you agree with Arne Duncan's proposal of cash incentives, giving kids a -- who receive "As" and "Bs" perhaps $100?

And what did the mayor say when you told him that you were taking Arne Duncan away from Chicago? – [laughter] – I don't get to ask often; I had to get them all in.

Obama: I understand.

Well, first of all, I think Arne, Joe, myself all agree that the Chicago public schools aren't as good as they need to be, and that the vast majority of schools that are under-performing can do better. That's our job, to raise expectations for parents, for students, for teachers, for principals, for school administrators. And that's what Arne has consistently done.

What I've been so impressed with is the dedication that he has -- has shown in continuous, steady improvement. And that's what we're looking for. Look, we're not going to transform every school overnight. And there are some school systems -- not just big-city school systems, there are rural schools and suburban schools -- that just aren't up to snuff. But what we can expect is that each and every day we are thinking of new, innovative ways to make the schools better. That's what Arne's done. That's going to be his job. That's going to be his task.

And one of the things that Arne and I share, I think, is a deep pragmatism in terms of how we go about this. If -- if pay for performance works, and we can work with teachers so they don't feel like it's being imposed on them, but instead they've got an option for different compensation mechanisms, in order for us to encourage high performance, then that's something that we should explore.

If charter schools work, let's try that. You know, let's not be clouded by ideology when it comes to figuring out what helps our kids.

And I -- I think Mayor Daley could not be prouder of Arne Duncan and the fact that the same dedication, hard work that he has shown here in Chicago he's going to be able to show to the entire country.

Lee: Thank you, Mr. President-elect. You had said before that you were going to appoint a number of Republicans to your Cabinet, and so far we haven't seen that many. Do you -- what can we expect in that area?

Obama: The -- I'm not giving you a preview. We've got some more appointments to make, and I -- I think that when you look at our entire White House staff and Cabinet and our various appointments I think people will feel that we followed through on our commitment to make sure that this is not only a(n) administration that is diverse ethnically, but it's also diverse politically, and it's diverse in terms of people's life experience.

Arne's somebody who has really been working on the ground, for example. He's not a creature of Washington. That's not where he cut his teeth. He cut his teeth working with kids individually, working in schools like this. You know, we have other people, obviously, who have Washington experience. And I think that blend is going to make us extraordinarily effective on not just our education agenda, but our broader agenda to help American families live out the American dream.